Low-Income Americans Now Getting Free Cell Phones

American taxpayers are now subsidizing a federal program that gives free cell phones to low-incomes residents. Photo: Reuters

The latest expansion of an already bloated federal government is a program aimed at putting free cell phones into the hands of low-income Americans.

Rebekah Rast, a columnist with Netright Daily, has ripped the lid off a federal program that taxes long distance providers and uses the funds to give low income households free mobile telephones. In other words, a tax that's passed onto hard-working Americans will subsidize a free cell phone program for 32 million low-income residents.

Telecommunication companies like Verizon, AT&T and Sprint have to provide this service per the Federal Communications Commission, she says. These companies hope that providing phones to low-income people might help them get new customers once those people can afford their the phones on their own, but until then, and in order to recoup their losses, the companies turn around and hike their fees to paying customers, according to Rast.

Rast then poses the question: Is having a cell phone now a civil right? "Looking at how widespread this program has become and seeing how much tax dollars are being poured into it, you'd think so," she says.

A perk of the program for low-income people is the cell phones are given to them for free, according to Rast. Some programs allow up to 250 free minutes a month. For a low-income person to qualify for a free cell phone program, including Lifeline or SafeLink, a person must meet federal low-income guidelines or qualify for one of many social service programs, including food stamps or Medicaid or even school lunch programs, she says.

According to Rast, the Heritage Foundation, a Washington-based think tank, summarizes the program this way:

"This particular program is covered by the federal Universal Service Fund. At first it received its money by essentially taxing telephone companies that provided long-distance service, with the money then being used to provide affordable rates for those living in less densely populated areas where phone service was more costly. However, in 1996, Congress voted to extend the use of this fund to subsidize low-income households and subsequently expanded the list of those required to pay into the fund to include: local telephone companies, wireless companies, paging services, and payphone providers. In 2008, the Federal Communications Commission began subsidizing cell phones for low-income households."

The price tag for this service in 2010 was $1.32 billion. Lifeline was the most prominent low-income program costing about $1.2 billion. "If there is ever an example of social welfare and the entitlement mentality, this is it," the president of Americans for Limited Government, Bill Wilson, said to Rast. "The government cannot afford to be handing out luxuries for free. Cell phones are not a necessity."

The Heritage Foundation reports that customers of these free cell phone programs are loosely monitored. "This means that if an individual's income increases to where he or she is no longer eligible for the service, there is no one to make sure he or she stops receiving it," the foundation's Robert Rector said to Rast.

"This type of program only promotes more American dependence on an already broken system," says Americans for Limited Government's Wilson. "The government cannot afford this program, nor can taxpayers. At a time when Washington needs to make spending cuts, this is one program that needs to be zeroed out."

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